Rolls-Royce Withdraws from Boeing NMA Competition

Citing timetable pressures, Rolls-Royce has withdrawn from the competition to power Boeing’s proposed NMA midsize airliner, thereby leaving two major engine companies to vie for the contract and potentially altering the airframer’s cost and timing calculation for the so-called middle-of-the-market jet. Although Boeing originally said it needed to launch the program by the end of this year to meet its 2025 target for entry into service, late last year it adjusted its sights somewhat, indicating that industrial launch likely wouldn’t happen until 2020. Boeing has long said that the timing of engine technology represented one of the biggest challenges associated with developing a viable new twin-aisle airliner capable of seating between 220 and 270 passengers and flying to a range of up to 5,000 nautical miles. Rolls-Royce, for one, has concluded that it could not meet those challenges in time with its proposed UltraFan.

“While we believe the platform complements Boeing’s existing product range, we are unable to commit to the proposed timetable to ensure we have a sufficiently mature product which supports Boeing’s ambition for the aircraft and satisfies our own internal requirements for technical maturity at entry into service,” said Rolls-Royce in a statement.

“This is the right decision for Rolls-Royce and the best approach for Boeing,” added Rolls-Royce civil aerospace president Chris Cholerton. “Delivering on our promises to customers is vital to us, and we do not want to promise to support Boeing’s new platform if we do not have every confidence that we can deliver to their schedule.”

Cholerton added that the company remains committed to the UltraFan design, however, and that it would continue to “de-risk” the architecture for future applications.

“UltraFan is the foundation of our future large civil aero engine programs and we must ensure that it has as smooth an entry into service as possible,” he said. “We had begun its development before the Boeing opportunity emerged and it must undergo a rigorous testing regime before we offer it to customers, which we do not believe can be achieved within the NMA timeframe. Withdrawing at this stage will enable Boeing to structure the final part of the competition in a way that best suits them, and we hope and expect to work with Boeing on other new opportunities in the future.”

The withdrawal of Rolls-Royce leaves the GE-Safran partnership CFM International and Pratt & Whitney as the final two contenders for the NMA propulsion award. Speaking at last year’s Farnborough Airshow, just two weeks after CFM submitted its bid, GE Aviation CEO David Joyce continued to reserve judgment on the business case for his company’s participation. Joyce instead confirmed that GE and CFM partner Safran have agreed to propose a CFM design, even if the required engine thrust slightly exceeds the 50,000-pound limit the partnership’s remit would typically allow.

Joyce added that GE continued to “wrestle” with the size of the market it believes exists for the 220- to 270-seat NMA, a consideration that will largely determine the viability of a dual-source arrangement for engines.

“The reality is it has to make economic sense,” said Joyce. “I would say we’re still wrestling with what the size of the market is, and that’s a big question, because people feel great when you launch, but your shareholders don’t feel great until it’s successful...That program’s got to turn into a program like the GEnx or Leap for us so these big investments come home.”

Boeing projects a potential market for 4,000 to 5,000 airplanes in the 220- to 270-seat capacity range the NMA would occupy, largely through opening new markets that now would prove unprofitable with a larger airplane or operationally infeasible with a smaller one. Boeing Commercial Airplanes CEO Kevin McAllister has pointed to some 200 new markets that airlines opened with the 787 as an example of the phenomenon.

“I think you see a couple of dynamics around the world,” said McAllister. “One is, you’ve got markets that are frequency-saturated where you want a bigger gauge airplane to be able to connect those two city pairs. And so, because the NMA sits on a higher seat count, it can go into some of these markets with more seats more economically. So that’s the high-density market that we were talking about.”